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Taxpayers storm out of school board meeting amid fallout from $1.1 million tax mistake

Richland-Bean Blossom hiring financial consultant
Posted: 12:54 PM, May 22, 2018
Updated: 2018-05-22 12:55:08-04

ELLETTSVILLE, Ind.— Taxpayers stormed out of a school board meeting Monday night after board members shut down public comment and then approved hiring a consultant to help with financial planning.

The fallout comes weeks after Call 6 Investigates exposed the Richland-Bean Blossom Community School Corporation made a $1.1 million mistake that’s forcing 10,500 taxpayers to pay a tax increase this spring.

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“You have lost our trust,” taxpayer Kathy Abell told the school board Monday night. “We don’t trust this board at all. We don’t trust you to spend money -- $50 million over the next seven years -- on a capital project.”

Taxpayers protested outside of the meeting and brought their signs into the meeting, but school board president Dana Kerr told them to take the signs down.

“If I stole $120 from my neighbor, I’d hear from the police,” read one sign.

Seven taxpayers spoke out against the mistake before school board president Dana Kerr cut off public comment, saying the board would not tolerate attacks on individuals.

This upset residents, who said they were not attacking anyone.

One taxpayer asked for the school board to step down from their elected positions.

“If I screw up on my taxes, I go to jail,” said one taxpayer. “Just resign. Period.”

Homeowners expressed concerns that the school board hired financial consultant George K. Baum to provide a second set of eyes on the books.

“Hiring a financial company who has already been doing the bond issuance is a conflict of interest,” said parent Katelynn Owens. “They’re already an entity that has overseen some of the financial errors that occurred.”

Board president Dana Kerr told Call 6 Investigates the contract would cost $7,000 to enter historical data and $1,600 a month for analysis and report.

“This is going to assist in budget preparations but also financial planning,” said Kerr at the meeting.

Taxpayers stormed out of the meeting after the board approved hiring George K. Baum, saying the board didn’t even discuss their concerns about the conflict of interest.

“We were very disrespected,” said taxpayer Melanie Head. “They didn’t listen to anything we had to say.”

“Any other person in any other job who made a $1 million mistake would get fired, not hire another person to come in and assist,” said Rufus Head. “It seemed very choreographed, like these things were already decided behind the scenes and it’s merely a carnival show that we’re showing up to.”

Superintendent Dr. Mike Wilcox made an error while preparing a debt worksheet submitted to the Indiana Department of Local Government Finance, Call 6 Investigates reported earlier this month.

Wilcox and the school board have apologized for the error, and sent letters to residents explaining how they made the mistake.

“I do believe we are a great school corporation and we’ve got greater things ahead of us,” said Kerr at the meeting.

The Department of Local Government Finance, the state agency responsible for ensuring local government budgeting is carried out in accordance with Indiana law, provided the following statement to Call 6 Investigates.

"Taxpayers within the Richland-Bean Blossom School Corporation appear to have been overtaxed in 2018 due to an error with the school corporation’s debt service reporting.  We have been in contact with the school board president and assured him that we will be happy to work with the school corporation moving forward to verify that the debt service tax rate for 2019 is consistent with the school corporation’s debt service needs.

 

The issue arose due to a miscommunication at the local level regarding lease rental payments. The original lease rental agreement featured an increased debt payment in 2019. The debt service levy for the increased payment would first impact 2018 property tax bills. Richland-Bean Blossom has discovered that it refinanced the debt approximately five years ago, but did not update its debt reporting to DLGF. The calculation on the debt service tax rate is based upon the debts reported by local governments, and so the increased payment was factored in to the 2018 levy and rate.

 

DLGF is exploring whether updates can be incorporated into the debt reporting process. Ultimately, however, responsibility remains with local governments to maintain accurate records on their outstanding debts and to report those debts to DLGF in a timely manner. Local officials are required to annually affirm that their debt reports are current, and through this process, should identify if a retired or refinanced debt is still listed as current."

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